• Taiwan Semiconductor (TSM) hit new all-time highs in Thursday morning trading.
• TSM boasts a 100% “Buy” opinion from Barchart, trades above key moving averages, and has gained 27% in the past month.
• Fundamentals remain robust, with projected revenue and earnings growth and widespread analyst support.
• While TSM faces geopolitical risks, positive sentiment and price targets suggest further upside.

Today’s Featured Stock

Valued at $1.5 trillion, Taiwan Semiconductor (TSM) is the world’s largest dedicated integrated circuit foundry. As a foundry, the company manufactures ICs for its customers based on their proprietary designs using its advanced production processes. 

TSMC’s goal is to establish itself as one of the world’s leading semiconductor companies by building upon the strengths that have made it the leading IC foundry in the world. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. TSM checks those boxes. Since the Trend Seeker signaled a new “Buy” on Sept. 9, the stock has gained 15.61%.

TSM Price vs. Daily Moving Averages:

Barchart Technical Indicators for Taiwan Semiconductor

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Taiwan Semi hit an all-time high of $296.72 in morning trading on Oct. 2.

• TSM has a Weighted Alpha of +75.85.
• Taiwan Semi has an 100% “Buy” opinion from Barchart.
• The stock gained 65.15% over the past year.
• TSM has its Trend Seeker “Buy” signal intact.
• Taiwan Semi is trading above its 20-, 50-, and 100-day moving averages.
• The stock made 12 new highs and gained 27.12% in the last month.
• Relative Strength Index (RSI) is at 75.20.
• There’s a technical support level around $280.27.

Don’t Forget the Fundamentals

• $1.5 trillion market capitalization.
• 31.85x trailing price-earnings ratio.
• 1.15% dividend yield.
• Revenue is projected to grow 27.02% this year and another 16.74% next year.
• Earnings are estimated to increase 39.96% this year and an additional 15.89% next year.

Analyst and Investor Sentiment on Taiwan Semiconductor

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping stock, it’s hard to make money swimming against the tide.

It looks like Wall Street analysts are high on TSM and so are individual investors.

• The Wall Street analysts tracked by Barchart have issued 9 “Strong Buys,” 1 “Moderate Buy,” and 2 “Hold” opinions on the stock.
• The price targets tracked by Barchart are between $242-$325.
• Value Line gives the stock its “Highest” rating with a price target of $332.
• CFRA’s MarketScope Advisor rates it a “Buy” with a price target of $295.
• Morningstar thinks the stock is fairly valued at $306.
• 3,696 investors following the stock on Motley Fool think the stock will beat the market while 185 think it won’t.
• 214,390 investors monitor the stock on Seeking Alpha, which rates the stock a “Strong Buy.”

The Bottom Line on Taiwan Semiconductor

TSM appears to have backing not only from Wall Street, but also from other financial advisory sites and individual investors. Positive projections of increases in both revenue and earnings are a good sign. From the price targets projected, it looks like it still has room to run. However, geopolitical issues remain a concern

Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.